Is Dropshipping Halal Or Haram? How To Sell What Is Not With Us In 2024

The traditional dropshipping method is haram. A person is advertising a product for sale on the Internet, but they don't own the goods. Instead, they request order fulfillment from the wholesaler after receiving an order. But the hadith of the Prophet is clear. A Muslim who doesn't own or have the goods cannot sell them. You need to own it and have possession of it.

Qudamah said in al-Mughni (4/155): "It is not permissible to sell an item that you do not possess so that you will go and buy it and deliver it." If these two conditions are violated, Islamically, the conventional dropshipping method is haram. However, it is possible to design a halal dropshipping store that complies with Islamic teachings. Become an agent and adhere to salam transactions. Here, the manufacturer is the offeror (Ja'il), and the dropshipper is the worker (Amil).

Dropshippers then receive a commission for the products they sell. Then, the business model is halal and permissible under Islamic values. Data suggests the global drop shipping market will reach $243.42 billion in 2023. But if you create a halal dropshipping business as per the teachings of Islam, you can make money online with the business model in 2024.

How To Make A Dropshipping Business Halal 

To make a Shopify dropshipping business halal:

1. First, speak to your wholesaler and agree with your business practices and how you will promote and sell a product. For each sale of a product you advertise on your website or online store, you receive a commission paid for promoting that sale. Then, inform the buyer that you're a non-affiliate of the product you're promoting. Advise them that you work under a commission and aren't tied to the product. In 2024, a Muslim may do this because now you are an agent to your supplier. You're not selling it directly; no risk is involved here. 
2. A second option is to have a reliable dropshipping supplier who can guarantee the delivery of products to the consumer. Then, adhere to the guidelines that heed Islamic teachings as follows:

Then, continue to learn about changes to the business model and stay up to date on current trends. Consider coaching from Islamic scholars or an advisor. The key is to connect with someone who can supply insights on ethically running your dropshipping business and avoid deceptive practices so it stays halal.

When Is It Permissible To Sell What Is Not With Us?

It is permissible to sell what is not with us if you adhere to the criteria for Bai' Al-Salam, which states the following:

Then, set up your drop shipping business per the following guidelines and specific circumstances:

Traditional drop shipping is not permissible under Islamic rules. Islamic teachings indicate that you cannot sell things you do not own. The alternative in 2024 is to show a product on your store or website.

When a potential buyer asks to purchase the item, you inform them that you will ship it to them for the shipping cost plus a fee. (This is like your commission). But if you don't tell a consumer that you are making a profit margin or refuse to take responsibility for the order fulfillment. Then, it is not permissible.

Is Dropshipping Halal?

Dropshipping is not halal. The drop shipper is selling products they do not own or have in their possession. In 2024, the view on this business venture continues to be unanimous with Islamic scholars and authorities on the hadith.

Is Dropshipping Haram? 

Dropshipping in the standard form is considered haram. As a dropshipper, you don't own or store inventory. But you cannot sell it because you don't own a physical product. Like the teachings we can read from the Messenger of Allah SAW, which directly forbids the sale of unclaimed things or items not in your possession. The prophet states that a Muslim who doesn't own or have the goods cannot sell them. Because these two conditions are violated, Islamically, the traditional drop shipping method is considered haram.

What Is The Ruling On Dropshipping In Islam?

The ruling on drop shipping in Islam is that the conventional drop shipping method is haram. This is because of the hadiths, we in the Profit peace be upon him, said do not sell what is not with you. But the context or interpretation of this hadith was a person asking if they could sell something.

Then, they would go to a market and find out if it was available, determine the price, buy it, and then deliver it. But if a dropshipper has an identified third party supplier or online retailer ready, willing, and able to sell what is not with you, they can sell the product. This can be supported by the sale of dates in Medina, which happened 2-3 years in advance (before the dates even existed).

What Are The Shariah Issues Raised Against Dropshipping?

Issues raised against dropshipping by Sharia law are:

1. The structure of the business model between the retailer and the consumer. (The sale of a non-possessed item).
2. The retailer's lack of possession (and possible risks). (The selling of a non-possible product).

These are reasons why dropshipping is a bad idea if you don't consult with the teachings of Islam. The Shariah-compliant alternative is to do the transaction through the model of Salam. Here, a dropshipper must explicitly advertise that they do not own the product.

Instead, they must indicate they will arrange order fulfillment, delivery, and customer service issues. The dropshipper promises the buyer they will provide the product for the said price. Once a mutual agreement is made and the consent to sell is legalized, it's a salam contract and can be considered halal.

How Can You Ensure The Products You Sell Through Dropshipping Are Halal?

To ensure the products you sell through drop shipping are halal:

For example, the supplier uses halal materials and a shipping company that can guarantee that there will be no contamination during transportation and will preserve the halal integrity of your inventory. Then, you can ensure that the condition of the product you sell through drop shipping is halal and remains in compliance with Islamic law.

Muslim drop shippers cannot sell prohibited or haram items under Islamic guidelines, such as pork or products used for haram activities like gambling. So, you must be diligent about what you sell and who you use as your supplier.

How Important Is Intention In Conducting A Halal Dropshipping Business? 

Intention in conducting a halal dropshipping business is critical. The best way to please Allah is to run a business that aligns with Islamic values. As a dropshipper, you need to conduct yourself and your business with honesty, transparency, and integrity. This includes things like:

• Refrain from engaging in riba or interest-based transactions. (Instead, use a payment gateway that complies with Islamic finance principles).  
• Use a tax method like zakat or almsgiving.
• Abstain from price gouging, dishonest or false advertising, or misleading information to stay compliant with Islamic principles.

 The Prophet peace be upon him, said, "Sales cannot occur except in that which you own." [Abu Dawud]

Is Amazon Dropshipping Halal Or Haram?

Amazon dropshipping, in the conventional sense, is considered haram. The hadith of Hakim ibn Hizam is clear. If you buy an item, you cannot sell it until you take possession of it; however, if you structure your Amazon drop shipping business based on a salam transaction style interaction between yourself and the buyer, you act as an agent instead of a seller. As a result, your Amazon drop shipping business can be considered halal.

What Are The Benefits & Risks Of Dropshipping?

What Is Dropshipping?

Drop shipping is an e-commerce-style online business model where a person can enter the market without owning or housing inventory. Instead, drop shippers rely on a third-party supplier to handle the product's packaging, shipping, and delivery to the customer. You don't need much capital to get started, and there is minimal risk involved compared to launching an e-commerce business. Repricer suggests that 23% of all online sales are fulfilled by drop shipping in 2023. 

Is Dropshipping Hard?

Yes, dropshipping is hard. Dropshippers need to know how to get attention from the right people on the Internet. Drop shipping isn't just about finding a winning product. In 2024, you need to be the better marketer. Know how to tap into consumer psychology and elicit an emotional response from your ideal customer so that they will buy your product.

Dropshippers need to develop a unique angle with ad copy or creatives that get people to stop their mindless scrolling and take action. As a dropshipper, you compete against thousands of other people selling the same stock using the same supplier. But this is one of the biggest disadvantages of drop shipping. So, you need to know how to stay one step ahead of the curve on the latest trends and get a ton of eyeballs on your product to make money with the business model in 2024.

Related Articles On Making Money Online

• Is Dropshipping Illegal? Read about five critical factors you need to know to protect yourself in 2024. 
• Is Shopify Dropshipping Dead? This article shares why I quit dropshipping and why 90% of people fail with the business model. 
• 10 Shopify Dropshipping Courses: Learn which courses deliver on value, the price, the coach, and the bonus materials offered in each of these ten top picks in 2024.

Why You Should Consider Local Lead Generation In 2024

Lead generation is an Islam-compliant business model because you own the digital asset. The website, the tracking number, and the leads belong to you. So, unlike dropshipping, you have full control over every aspect of your online business. The idea is to build and rank simple websites.

Pick one service and target one location. Because the focus is on the local market, you can get to the top of the SERPs in under six months. Research shows that in 2023, there are at least 8.5 billion Google searches per day. But once your lead gen sites are at the top, they're in front of people actively searching for your service. They're like digital billboards and generate leads. 

When they bring in leads, find a local business owner willing to complete the work. Then, create a salam contract where they pay you a commission or 'sliver to deliver' for your leads. Data reveals that over 29% of small businesses don't have a website. So you're helping small businesses get more work and making a steady income online.

There's no limit to how many sites you build and rank. Once they're at the top, your lead generation websites don't need much work (10-15 hours/month). Build ten or build one hundred. But each site can make $500-$2000/month, so the more sites you own, the more money you will earn. Then, you can harness time freedom and earn passive income.